Petroleos de Venezuela SA, or PdVSA, said Tuesday it had taken control of an off-shore oil rig owned by Ensco International Inc. (ESV), following failed talks to settle a pending bill.

PdVSA's move to seize the oil rig is the first such measure taken at a difficult time for the cash-strapped oil company. As oil prices have dropped by more than $100 a barrel from their record highs last summer, PdVSA has fallen behind on payments to suppliers, a growing concern within Venezuela's oil industry.

Ensco, a leading energy drilling contractor and owner of the Ensco 96 rig, "paralyzed [the rig's] operations and abandoned its contractual obligations," PdVSA said in a statement.

Ensco officials could not immediately comment on the matter.

The Ensco 96 was deployed to oil-pumping operations in the Paria Gulf's Corocoro field, an area that U.S. company ConocoPhillips (COP) once controlled before leaving the Andean nation in 2007.

Conoco is now in arbitration proceedings with PdVSA following the nationalization of its assets in the Orinoco region. Venezuela's state oil company now runs the field.

The Texas-based Ensco chose to cease operations even as it negotiated "terms and conditions (for PdVSA) to pay off pending debts," the note added. PdVSA said Ensco refused to accept several settlement proposals presented by Petrosucre, a joint venture company that PdVSA controls.

PdVSA did not specify how much it owes Ensco or what it plans to do with the company's equipment, but said that Ensco has managed to make as much as $110 million from the rig's operations.

The Ensco 96 is the company's sole rig in the oil-rich country. According to Ensco's latest offshore rig report, the company was charging PdVSA a day rate in the "mid $180,000s" for the rig. Since it began operations in January 2006, the rig has helped drill 18 wells.

Venezuela's Petroleum Chamber has lately pressed PdVSA to pay off hundreds of millions of dollars in unpaid bills to oil service companies and other contractors. So far, however, no agreements have been reached to settle these obligations.

-By Raul Gallegos; Dow Jones Newswires; +58-212-905-6338; raul.gallegos@dowjones.com

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